In line with the paradigmatic shift in the theory and practice of governance since 1980s, state management of irrigation schemes has been replaced by irrigation schemes. It is driven by the popular understanding that community based natural resources management (CBNRM) presents the best alternative for governing local resources and achieving resource sustainability. The nature of irrigation schemes, however, subject resource users to competition and resource exploitation resulting in a situation Hardin calls “tragedy of the commons”. Present CBNRM regime, as guided by theories in social capital and institutionalism, argues that local communities are capable of equitably and sustainably managing their local resources. Using Domasi and Njala irrigation schemes, this study explores the challenges faced by irrigation farmers in effectively managing their irrigation schemes. The study employed both qualitative (interviews, participant observation and focus group discussions) and quantitative (survey) methods of data collection. The study findings reveal that irrigation management at the two sites faces a number of challenges such as resource access inequalities, corruption and conflicts. This demonstrates that the success of CBNRM largely depends on the existence of a democratic culture and not mere presence of social capital and locally crafted institutions. Thus, to remain credible theories backing CBNRM need to underscore the significance of creating a democratic society in the process of building collective action. In this process, rather than being left out, informal institutions should be allowed to evolve together with formal institutions.